(Bloomberg) — China will double the yuan trading band for the ruble amid signs of distressed liquidity as banks back away from making markets.

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The currency pair will be allowed to trade 10% around the fixing rate to meet demand for market development from March 11, the China Foreign Exchange Trade System said in a statement. That compares with a previous limit of 5%.

The change shows how global financial institutions are attempting to cope with the ruble’s volatility, as Russia is increasingly cut off from markets after it invaded Ukraine. The yuan hit a record high against the ruble last week, with some Chinese banks suspending trading of the currency pair.

“It is the policy measure in response to volatile RUB trading,” said Ken Cheung, Asia FX strategist at Mizuho Bank Ltd. “The measure is to give market markers the ability to set the price and improve the RUB/CNY trading liquidity.”

The volatility has led to waning interest to trade the currency pair, with the gap between the bid-ask price hitting a record 197 pips Wednesday. The gap narrowed to 106 pips after the latest announcement. The yuan bought 13.6 ruble on Feb. 25 in China’s onshore spot market.

Read: Yuan’s Record Surge Against Ruble Is a Shadow Sanction for Trade

China has vowed to continue normal trade relations with Russia, which is seen as a strategic partner, despite a massive corporate exodus from European and American firms.

Total bilateral trade between the two countries was valued at $112 billion in 2020, according to Bloomberg calculations based on data from the International Monetary Fund. Presidents Xi Jinping and Vladimir Putin only last month signed a series of deals to boost Russian supply of gas, oil and wheat.

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The change in trading range was approved by the People’s Bank of China, the statement said. The yuan-ruble fixing rate released by the PBOC on Thursday stood at 21.6, a record.

“The move to widen the trading band with the ruble will allow more flexibility in pricing and reduces the need for direct intervention,” said Peiqian Liu, an economist at NatWest Markets.

The 10% limit compares with 5% for most of the onshore yuan’s foreign exchange pairs. The last time China widened the trading band for a foreign currency was in 2014, when it doubled the permitted range for dollar-yuan to 2%.

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